The liberalization of the Indian economy in the early nineties has played a major role in the growth of the

IT industry of India. Deregulation policies adopted by the Government of India have led to substantial domestic investment and inflow of foreign capital to this industry. In 1970, high import duties had forced IBM to leave India. However, after the early nineties, many multinational IT companies, including IBM, have set up their operations in India. During the ten year period 1992-2002, the Indian software industry grew at double the rate as thus software industry. Some of the major reasons for the significant growth of the IT industry of India are Abundant availability of skilled manpower Reduced telecommunication and internetcosts Reduced import duties on software and hardware products Cost advantages Encouraging government policies.

The profile of the Indian IT Services has been undergoing a change in the last few Years, partly as it moves up the value chain and partly as a response to the market dynamics. Ten years ago, most US companies would not even consider outsourcing some of their IT projects to outside vendors. The market competition is forcing organizations to cut down on costs of products. The professional IT Services on the other hand are becoming increasingly expensive. The offshore software development model is today where onsite professional services were ten years ago. There is a high chance (almost a mathematical certainty), that

in less than ten years, the vast majority of IT Services (software development being just one of them) from developed countries, will be, one, outsourced to an offshore vendor.

Now, ten years later, a vast majority of US companies use the professional services of Indian Software engineers in some manner, through large, medium or small companies. Despite the global economic slowdown, the IT Software and services industry is maintaining a steady pace of growth. Software development activity is not confined to a few cities in India. Software development centers, such as Bangalore, Hyderabad, Mumbai, Pune, Chennai, Calcutta, Delhi-Noida-Gurgaon, Vadodara, Bhubaneswar, Ahmedabad, Goa, Chandigarh, Trivandrum are all developing quickly. All of these places have state-of-the-art software facilities and the presence of a large number of overseas vendors. Indias most prized resource is its readily available technical work force. India has the second largest English-speaking scientific professionals in the world, second only to the U.S. It is estimated that India has over 4 million technical workers, over 1,832 educational institutions and polytechnics, which train more than 67,785 computer software professionals every year. The enormous base of skilled manpower is a major draw for global customers. India provides at one-tenth the price.